UNITED  STATES

SECURITIES AND EXCHANGE
COMMISSION

WASHINGTON,  D.C.  20549

___________________

## FORM 10-Q

(Mark One)

##### X  QUARTERLY  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

OR

##### TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

Commission file number 000-22327

## CONCERO INC.

Incorporated Pursuant to the Laws of the State of Delaware

___________________

Internal Revenue Service-Employer Identification No. 74-2796054
6300 Bridgepoint Parkway, Building 1, Suite 500, Austin Texas   78730
(512) 343-6666

Indicate by check mark whether the  registrant  (1) has filed all reports
required to be filed by  Section 13 or 15(d) of the  Securities  Exchange Act of 1934 during the  preceding 12 months (or for
such shorter  period that the registrant was required to file such  reports),  and (2)has been subject to such filing  requirements
for the past 90 days.

Yesx      No __________

Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock,  as of the latest practicable  date:  10,233,090 shares of the Company's Common Stock,  $.01 par value, were
outstanding as of July 31, 2002.

`CONCERO INC.

                                                   Table of Contents



                                                                                                               Page
                                            Part I - Financial Information

Item 1.     Financial Statements (Unaudited)......................................................................3

            Condensed Consolidated Balance Sheets - December 31, 2001 and June 30, 2002...........................3

            Condensed Consolidated Statements of Operations - Three Months and Six Months Ended
              June 30, 2001 and June 30, 2002.....................................................................4

            Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2001
              and June 30, 2002...................................................................................5

            Notes to Condensed Consolidated Financial Statements..................................................6

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations........................................................10

Item 3.     Quantitative and Qualitative Disclosures about Market Risks..........................................21



                                            Part II - Other Information


Item 4.     Submission of Matters to a Vote of Security Holders..................................................21

Item 6.     Exhibits and Reports on Form 8-K.....................................................................21

            Signatures...........................................................................................22`

`PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

                                                     CONCERO INC.
                                         Condensed Consolidated Balance Sheets
                                         (in thousands, except per share data)

                                                                 December 31,            June 30,
                                                                     2001                  2002
                                                               -----------------    -----------------
                                                                                        (Unaudited)
Assets
Current assets:
   Cash..............................................                $     4,141             $    401
   Short-term  investments...........................                      8,964                8,976
   Accounts receivable, net of allowance for doubtful
      Accounts of  $612 at December 31, 2001 and $100
      at June 30,  2002..............................                        823                   28
   Unbilled revenue under customer contracts.........                        557                    -
   Income tax receivable.............................                         11                  604
   Prepaid expenses and other current assets.........                        594                  449
                                                               ------------------     ----------------
Total current assets.................................                     15,090               10,458
Property and equipment, net..........................                      1,554                1,084
                                                               ------------------     ----------------
Total assets.........................................                $    16,644            $  11,542
                                                               ==================     ================

Liabilities and stockholders' equity
Current liabilities:
   Trade payables.....................................                                      $      66                  109
   Accrued expenses and other current liabilities.....                     5,445                2,677
                                                               ------------------     ----------------
Total current liabilities.............................                     5,511                2,786

Stockholders' equity:
  Preferred stock, par value $.01 per share, 1,000 shares
     authorized and none issued and outstanding......                          -                    -

  Common stock, par value $.01 per share, 34,000 shares
     authorized, 10,163 and 10,201 shares issued and
     outstanding at December 31, 2001 and June 30, 2002,
     respectively.....................................                       102                  102
  Additional paid-in capital..........................                    33,734               33,737
  Retained deficit....................................                   (22,703)             (25,083)
                                                               ------------------     ----------------
Total stockholders' equity............................                    11,133                8,756
                                                               ------------------     ----------------

Total liabilities and stockholders' equity............                $   16,644            $  11,542
                                                               ==================     ================

                                                See accompanying notes.`

`CONCERO INC.
                                    Condensed Consolidated Statements of Cash Flows
                                                    (in thousands)
                                                      (Unaudited)


                                                                                 Six Months
                                                                               Ended June 30,
                                                                     -----------------------------------
                                                                               2001                2002
                                                                     ---------------     ---------------
Operating activities
Net loss...................................................                $(14,829)          $  (2,381)
Adjustments to reconcile net loss to net cash used in
   operating activities:
     Depreciation and amortization.........................                   1,020                 356
     Write-off of excess property and equipment reserve....                   2,541                 280
     Bad debt expense, net of recoveries...................                     (66)               (502)
     Changes in operating assets and liabilities:
        Accounts receivable................................                   5,470               1,308
        Unbilled revenue under customer contracts..........                     (28)                557
        Prepaid expenses and other current assets..........                     182                 144
        Trade payables.....................................                    (358)                 43
        Deferred taxes.....................................                   2,315                   -
        Accrued expenses and other current liabilities.....                   1,718              (2,777)
        Income taxes.......................................                       -                (593)
                                                                     ---------------     ---------------
Net cash used in operating activities......................                  (2,035)             (3,565)
                                                                     ---------------     ---------------

Investing activities
Sale (purchase) of short term investments, net.............                   4,568                 (12)
Acquisition of property and equipment......................                  (1,019)               (166)
                                                                     ---------------     ---------------
Net cash provided by investing activities..................                   3,549                (178)
                                                                     ---------------     ---------------

Financing activities
Proceeds from issuance of common stock, net of issuance cost.                    33                   3
                                                                     ---------------     ---------------
Net cash provided by financing activities..................                      33                   3
                                                                     ---------------     ---------------

Net increase (decrease) in cash............................                   1,547              (3,740)
Cash, beginning of period..................................                   1,611               4,141
                                                                     ---------------     ---------------

Cash, end of period........................................                $  3,158           $     401
                                                                     ===============     ===============

Non-cash activities:
Unrealized loss on investments.............................               $    (66)           $       -
Reversal of deferred tax asset.............................               $   2,281           $       -

                                                See accompanying notes.`

CONCERO INC.
                                 Notes to Condensed Consolidated Financial Statements
                                                     June 30, 2002
                                                      (Unaudited)

##### 1.     Nature of Business

Concero Inc. ("Concero" or the "Company") is a provider of interactive  television solutions.  Concero provides systems
integration  consulting  services that enable cable operators,  content providers and application  providers to deliver
compelling  entertainment-on-demand  services and other video-on-demand  enabled  applications.

We recently  announced  that we have ceased  operations and begun the process of  liquidating  and dissolving  Concero,
subject to  required  stockholder  approval.  We have  retained a small  number of  employees  to attend to the orderly
disposition of our assets and liabilities.  See note 7.

##### 2.     Basis of Presentation

The accompanying  unaudited condensed  consolidated  financial  statements include the accounts of Concero Inc. and its
wholly  owned  subsidiaries.   All  significant  inter-company  balances  and  transactions  have  been  eliminated  in
consolidation.  The accompanying  unaudited condensed  consolidated financial statements have been prepared pursuant to
the rules  and  regulations  of the  Securities  and  Exchange  Commission  (the  "SEC")  regarding  interim  financial
reporting.  Accordingly,  they do not include all the information and notes required by accounting principles generally
accepted in the United States for complete  financial  statements and should be read in conjunction  with the financial
statements  and notes  thereto for the year ended  December 31, 2001  included in the  Company's  annual report on Form
10-K. The  accompanying  financial  statements  reflect  adjustments,  all of which are of a normal  recurring  nature,
which are, in the opinion of management,  necessary for a fair  presentation.  The results for interim  periods are not
necessarily indicative of full year results.

We recently announced that we have ceased operations and begun the process of
liquidating and dissolving Concero,  subject to required  stockholder  approval.
The  accompanying  condensed  consolidated  balance  sheets  and  statements  of
operations and cash flows were prepared on the going concern basis of accounting
that  contemplates  the realization of assets and satisfaction of liabilities in
the normal  course of business.  Liquidation  basis  accounting  will be adopted
effective  August 8, 2002,  the date of the  resolution  by  Concero's  board of
directors  to cease  operations.  As a result of these  developments,  we do not believe
any historical  financial  information, including historical financial information in this Form 10-Q  provides a meaningful
indication  of our future  financial condition and results of operations, and accordingly, should not be relied upon.  See Note 7

In  November  2001,  the FASB issued  staff  announcement  (Topic No.  D-103),  Income  Statement  Characterization  of
Reimbursements Received for 'Out-of-Pocket' Expenses Incurred,  which was subsequently  incorporated in Emerging Issues
Task Force  Issue No.  01-14  ("EITF  Issue No.  01-14").  EITF Issue No.  01-14  requires  companies  to  characterize
reimbursements  received for  out-of-pocket  expenses as revenues in the statement of operations.  EITF Issue No. 01-14
had no effect on net loss as it increased  both  revenues and  expenses.  As a result of the adoption of EITF Issue No.
01-14,  the Company has restated its condensed  consolidated  statement of  operations  for the quarter ended March 31,
2001 to reflect reimbursements received for out of pocket expenses as revenue and technical staff expenses.

##### 3.     Comprehensive Loss

`The components of comprehensive loss for the three and six months ended June 30, are as follows (in thousands):

                                                           Three months ended                Six months ended
                                                                June 30,                         June 30,
                                                             2001             2002            2001             2002
                                                      ------------     ------------    ------------     ------------

Net loss....................................             $ (3,394)       $    (616)       $(14,829)        $ (2,381)
Unrealized loss on short term investments...                    -                -             (66)               -
                                                      ------------     ------------    ------------     ------------
Comprehensive loss..........................             $  (3,394)      $    (616)       $(14,895)        $ (2,381)
                                                      ============     ============    ============     ============`

CONCERO INC.
                                 Notes to Condensed Consolidated Financial Statements (Continued)
                                                     June 30, 2002
                                                      (Unaudited)

##### 4.     Loss per Share

The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share
data) for the three and six months ended June 30:

`Three months ended                      Six months ended
                                                                 June 30,                               June 30,
                                                                2001              2002               2001               2002
                                                     ----------------    --------------     --------------    ---------------
Numerator:
  Net loss........................................          $ (3,394)         $   (616)         $ (14,829)          $ (2,381)
                                                     ================    ==============     ==============    ===============

Denominator:
  Shares used in basic loss per share calculation.            10,188            10,229             10,188             10,227

  Effect of dilutive securities:
    Employee stock options.......................                  -                 -                  -                  -
    Warrants.....................................                  -                 -                  -                  -
                                                     ----------------    --------------     --------------    ---------------
  Shares used in diluted earnings loss per
    share calculation............................             10,188            10,229             10,188             10,227
                                                     ================    ==============     ==============    ===============

Basic loss per share.............................           $  (0.33)         $  (0.06)         $   (1.46)          $  (0.23)
                                                     ================    ==============     ==============    ===============

Diluted loss per share...........................           $  (0.33)         $  (0.06)         $   (1.46)          $  (0.23)
                                                     ================    ==============     ==============    ===============`

CONCERO INC.
                                 Notes to Condensed Consolidated Financial Statements (Continued)
                                                        (Unaudited)

##### 5.     Cost Reduction Measures

In 2001,  the Company  implemented  cost  reduction  measures to more closely align its cost  structure  with near-term
future revenue  opportunities.  These cost reduction measures continued in 2002 and included workforce reductions,  the
impairment of equipment,  the  establishment  of reserves for excess leased office space.  Pursuant to the recent lease
restructuring  with Concero's  Austin,  Texas  landlord,  results for the second quarter of 2002 include a reduction of
the  accrual  for excess  leased  office  space of $1.4  million.  As a result of these cost  reduction  measures,  the
Company  recorded a charge  (offset) to other expense of  approximately  $2.4 million and $(1.4)  million in the second
quarter of 2001 and 2002,  respectively,  and $7.0  million  and  $(672,000)  in the first six months of 2001 and 2002,
respectively, as follows (in thousands):

`Severance        Impairment of                Lease             Total
                                                                       Equipment          Commitments
                                              --------------    -----------------    -----------------    --------------
Accrual balance at December 31, 2000.....          $      -              $     -             $      -         $       -
   Charge to other expense...............             1,512                2,150                  954             4,616
   Payments and charges made.............              (584)              (2,150)                 (16)           (2,750)

                                              --------------    -----------------    -----------------    --------------
                                              --------------    -----------------    -----------------    --------------
Accrual balance at March 31, 2001........          $    928              $     -             $    938         $   1,866
                                              --------------    -----------------    -----------------    --------------
   Charge to other expense...............               811                  391                1,177             2,379
   Payments and charges made.............            (1,317)                (391)                (302)           (2,010)

                                              --------------    -----------------    -----------------    --------------
                                              --------------    -----------------    -----------------    --------------
Accrual balance at June 30, 2001.........          $    422              $     -             $  1,813         $   2,235
                                              --------------    -----------------    -----------------    --------------
                                              --------------    -----------------    -----------------    --------------

Accrual balance at December 31, 2001.....          $      -              $     -             $  4,025         $   4,025
Charge to other expense..................               170                  280                  230               680
   Payments and charges made.............              (104)                (280)                (845)           (1,229)

                                              --------------    -----------------    -----------------    --------------
                                              --------------    -----------------    -----------------    --------------
Accrual balance at March 31, 2002........          $     66              $     -             $  3,410         $   3,476
                                              --------------    -----------------    -----------------    --------------
   Charge to other expense...............                 7                    -               (1,359)           (1,352)
   Payments and charges made.............               (64)                   ()                (677)             (741)

                                              --------------    -----------------    -----------------    --------------
                                              --------------    -----------------    -----------------    --------------
Accrual balance at June 30, 2002.........          $      9              $     -            $   1,374         $   1,383
                                              --------------    -----------------    -----------------    --------------`

In the second  quarter of 2001 and 2002,  the Company  recorded  severance  costs  related to the release of 67 and one
technical,  sales and  administrative  personnel,  respectively.  In the six months  ended June 30, 2001 and 2002,  the
Company  recorded  severance costs related to the release of 197 and 14 personnel,  respectively.  To further  conserve
cash resources,  Concero recently completed a significant  reduction in force, in order to reduce its staff expenses by
an anticipated $3.2 million  annually.

Impairment of equipment  relates to excess  property and equipment,  primarily  leasehold  improvements,  equipment and
furniture  utilized by terminated  personnel.  Lease  commitments  relate to the excess  office space of  approximately
97,500 square feet,  or 91% of the office space  occupied by the Company at December 31, 2000.  Accrued lease  payments
at June 30, 2002 are  expected to be paid over the  remaining  recently  re-negotiated  lease  terms,  which  extend to
various dates through 2005. The estimated costs of abandoning  these leased  facilities,  including  estimated costs to
sublease,  brokerage  commissions and resulting sublease income, were based on market information and trend analysis as
estimated by the Company.  Actual results could differ from these  estimates,  and such  differences  could be material
to the financial  statements.  In particular,  actual  sublease  income  attributable  to the  consolidation  of excess
facilities  might  deviate  from  the  assumptions  used  to  calculate  the  Company's   accrual  for  facility  lease
commitments.  With the  exception of the  impairment  of excess  equipment,  all payments and charges made involved the
disbursement of cash.

We recently  announced  that we have ceased  operations and begun the process of  liquidating  and dissolving  Concero,
subject to  required  stockholder  approval. The  accompanying  condensed  consolidated  balance sheets and statements of operations
and cash flows were prepared on the going concern basis of accounting that  contemplates  the realization of assets and
satisfaction of liabilities in the normal course of business.  Liquidation  basis  accounting  will be adopted  effective  August 8,
2002, the date of the  resolution  by Concero's  board of directors  to cease  operations.  See note 7.

CONCERO INC.
                                 Notes to Condensed Consolidated Financial Statements (Continued)
                                                     June 30, 2002
                                                      (Unaudited)

##### 6.     Income Taxes

The exercise of certain  stock  options  which have been  granted  under the  Company's  stock option plan give rise to
compensation  which is includable in the taxable income of the  applicable  option holder and deductible by the Company
for federal and state income tax  purposes.  The  information  for the quarter ended March 31, 2001 includes a non-cash
income tax charge of $2.3  million  to  establish  a  valuation  allowance  against  the  deferred  tax asset for stock
options,  which was originally  recorded as a reduction of  shareholders'  equity in that quarter due to  uncertainties
regarding the  realization of the deferred tax assets.  In March of 2002, a new U.S.  federal income tax law was passed
which allows for a  temporarily  lengthened  loss  carry-back  period.  This new law allows the Company to carry-back a
portion of the tax loss  incurred  in 2001 to prior  years,  resulting  in an income tax  receivable  of  approximately
$605,000, which was collected in July 2002.

##### 7.     Subsequent Event

We recently  announced  that we have ceased  operations and begun the process of  liquidating  and dissolving  Concero,
subject to  required  stockholder  approval.  We have  retained a small  number of  employees  to attend to the orderly
disposition of our assets and liabilities.

The  accompanying  condensed  consolidated  balance sheets and statements of operations and cash flows were prepared on
the going concern basis of accounting that  contemplates  the realization of assets and  satisfaction of liabilities in
the normal course of business.  Liquidation  basis  accounting  will be adopted  effective  August 8, 2002, the date of
the  resolution  by Concero's  board of directors  to cease  operations.  Under the  liquidation  basis of  accounting,
assets are stated at their estimated net realizable  value and liabilities are stated at their estimated  amounts.  The
valuation of assets and liabilities  requires many estimates and assumptions,  and there are substantial  uncertainties
in  liquidating  the Company.  In  particular,  the carried  values of the Company's  property and  equipment,  accrued
expenses and total  stockholders'  equity are  expected to be  materially  effected by the adoption of the  liquidation
basis of accounting.  Additionally,  the  administrative  costs of the liquidation and  dissolution,  and the length of
the process are not known at this time and could materially  effect the  determination of liabilities and stockholders'
equity in connection with the adoption of liquidation accounting. As a result of these  developments,  we do not believe
any historical  financial  information, including historical financial information in this Form 10-Q  provides a meaningful
indication  of our future  financial condition and results of operations, and accordingly, should not be relied upon.

##### Item 2.

#### MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to the historical information contained herein, the discussion in this Form 10-Q contains forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that involve risks and uncertainties, such as statements for the plans, objectives,
expectations and intentions of Concero. Such forward looking statements are generally accompanied by words such as
"plan," "estimate," "expect," "believe," "could,"  "would," "anticipate," "may," or other words that convey
uncertainty of future events or outcomes. These forward-looking statements and other statements made elsewhere in
this report are made in reliance on the Private Securities Litigation Reform Act of 1995. The cautionary statements
made in this Form 10-Q should be read as being applicable to all related forward-looking statements whenever they
appear in this Form 10-Q.  Our actual results could differ materially from the results discussed in the
forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited
to, those discussed under the section below entitled "Factors That May Affect Future Results, Financial Condition and
Market Price of Securities" as well as those cautionary statements and other factors set forth elsewhere herein.

#### Overview

We recently  announced that we had determined to cease  operations and liquidate the company.  We have released all but
a small  number of  employees  who will help manage the  liquidation.  We will  conduct an orderly  disposition  of our
assets and liabilities in order to maximize  stockholder  value. As a result of these  developments,  we do not believe
any historical  financial  information, including historical financial information in this Form 10-Q  provides a meaningful
indication  of our future  financial condition and results of operations, and accordingly, should not be relied upon.

#### Critical Accounting Policies and Estimates

The  discussion  and analysis of our  financial  condition and results of  operations  are based upon our  consolidated
financial  statements,  which have been prepared in accordance with  accounting  principles  generally  accepted in the
United States.  The preparation of these financial  statements  requires us to make estimates and judgments that affect
the reported amounts of assets,  liabilities,  revenues and expenses,  and related  disclosure of contingent assets and
liabilities.  On an on-going  basis,  we evaluate our estimates,  including  those related to bad debts,  income taxes,
restructuring  and litigation.  We base our estimates on historical  experience and on various other  assumptions  that
are believed to be reasonable under the  circumstances,  the results of which form the basis for making judgments about
the carrying  values of assets and  liabilities  that are not readily  apparent from other sources.  Actual results may
differ from these estimates under different assumptions or conditions.

Liquidation  basis  accounting  will be adopted  effective  August 8, 2002, the date of
the  resolution  by Concero's  board of directors  to cease  operations.  Under the  liquidation  basis of  accounting,
assets are stated at their estimated net realizable  value and liabilities are stated at their estimated  amounts.  The
valuation of assets and liabilities  requires many estimates and assumptions,  and there are substantial  uncertainties
in  liquidating  the Company.  In  particular,  the carried  values of the Company's  property and  equipment,  accrued
expenses and total  stockholders'  equity are  expected to be  materially  effected by the adoption of the  liquidation
basis of accounting.  Additionally,  the  administrative  costs of the liquidation and  dissolution,  and the length of
the process are not known at this time and could materially  effect the  determination of liabilities and stockholders'
equity in connection with the adoption of liquidation accounting.

We believe the following represent our critical accounting policies:

Revenue from service  contracts is  recognized  when  persuasive  evidence of an  arrangement  exists,  delivery of the
services has occurred, the fee is fixed and determinable,  and collection is probable.  Revenue from time and materials
contracts is recognized  during the period for which the services are provided.  Revenue from fixed price  contracts is
recognized  using the  percentage-of-completion  method,  measured by the  percentage of units of labor incurred to the
date of measurement  relative to the estimated total units of labor at completion.  The cumulative  impact of revisions
in estimates of the  percentage to complete is reflected in the period in which the revisions are made.  Provisions for
estimated  losses on uncompleted  contracts are made on a  contract-by-contract  basis and are recognized in the period
in which such losses are  determined.  Revenue  earned in excess of billings is  classified  as unbilled  revenue under
customer  contracts.  Billings  in excess of earned  revenue  are  classified  as deferred  revenue.  Revenue  includes
reimbursable  expenses.  Revenue from  product  license fees is generally  recognized  when  persuasive  evidence of an
arrangement  exists,  delivery and deployment of the product has occurred,  we have fulfilled  significant  obligations
with regard to implementation,  the fee is fixed and determinable and  collectibility is probable.  We have recorded no
product license revenue in 2001 or 2002.

We maintain  allowances for doubtful accounts for estimated losses resulting from the  uncollectibility of our accounts
receivable,  specifically,  our  customers  inability to make  required  payments.  We use a  combination  of the aging
method, based on historical collection  experience,  and customer-specific  identification of potential bad debt losses
to estimate our  allowance for doubtful  accounts.  If the financial  condition of our customers  were to  deteriorate,
resulting in an impairment of their ability to make payments, additional allowances may be required.

We vacated  excess  leased  facilities  as a result of the cost  reduction  measures  taken during 2001. We maintain an
accrual for the remaining lease  liabilities of such properties as well as brokerage  commissions,  partially offset by
estimated  sublease  income.  We estimated the costs of these excess leased  facilities,  including  estimated costs to
sublease and resulting sublease income,  based on market  information and trend analysis.  During the second quarter of
2002,  we  reduced  the  accrual  for  excess  leased  office  space  by $1.4  million  as a result  of a recent  lease
restructuring  with our Austin,  Texas  landlord.  Actual  results could differ from these  estimates.  In  particular,
actual sublease income  attributable to the  consolidation of excess facilities might deviate from the assumptions used
to calculate our accrual for facility lease commitments.

We account for income taxes using the liability  method,  whereby deferred tax asset and liability account balances are
determined based on differences  between financial  reporting and tax bases for assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

##### Results of Operations

The following table sets forth the percentage of revenue of certain items included in our condensed statement of
operations for the periods indicated:

`Three Months                           Six Months
                                                     Ended June 30,                        Ended June 30,

                                                 2001              2002               2001               2002

Revenue................................          100%                100%             100%               100%
Operating expenses:
   Technical staff.....................           61                  45               73                 73
   Research and development............            -                 544                -                193
   Selling and administrative staff....           21                 229               27                109
   Other expenses......................           71                (408)              86                 37
                                                                                --------------    ---------------
                                            ---------------    --------------
Total operating expense................          153                410                 186              412
                                            ---------------    --------------     --------------    ---------------
Income (loss) from operations..........          (53)              (310)                (86)            (312)
Interest income........................            2                 24                3                 12
Provision for income taxes.............            -                  -               15                (61)
                                            ---------------    --------------     --------------    ---------------
Net income (loss)......................          (51)%               (286)%            (98)%            (239)%
                                            ===============    ==============     ==============    ===============`

#### Three Months Ended June 30, 2002 Compared to the Three Months Ended June 30, 2001

We recently  announced that we had determined to cease  operations and liquidate the company.  We have released all but
a small  number of  employees  who will help manage the  liquidation.  We will  conduct an orderly  disposition  of our
assets and liabilities in order to maximize  stockholder  value.The  accompanying  condensed  consolidated  balance sheets
and statements of operations and cash flows were prepared on the going concern basis of accounting that  contemplates  the
realization of assets and  satisfaction of liabilities in the normal course of business.  Liquidation  basis  accounting  will be
adopted  effective  August 8, 2002, the date of the  resolution  by Concero's  board of directors  to cease  operations.  As a
result of these  developments,  we do not believe any historical  financial  information, including historical financial information in this Form 10-Q  provides a meaningful
indication  of our future  financial condition and results of operations, and accordingly, should not be relied upon.

#### Revenue

Our revenue  consists  primarily of fees for software  services  provided.  Revenues  decreased  97% to $215,000 in the
quarter ended June 30, 2002 from $6.7 million in the quarter ended June 30, 2001.  The decline was  principally  due to
reduced  demand for  e-business  services due to a weak  economy and low capital  spending on  information  technology.
Additionally,  in conjunction  with our cost  reduction  measures and shift in strategy from  e-business  services to a
provider of software and related integration  services,  we eliminated our regional offices and staff that historically
provided  material  support of the sale and delivery of our e-business  services.  Comparing the second quarter of 2002
with the same period in 2001, our average hourly bill rate increased slightly to $146 from $141.

In the second quarter of 2002, three customers  accounted for 57%, 16% and 10% of our revenue and, in total,  accounted
for  essentially all of our current  accounts  receivable as of June 30, 2002.  Three customers  accounted for 25%, 12%
and 11% of revenue in the second  quarter of 2001.  No other client  accounted  for more than 10% of revenue for either
period.

#### Technical Staff

Technical staff expenses consist of the cost of salaries,  payroll taxes,  health  insurance and workers'  compensation
for technical  staff personnel  assigned to client  engagements and unassigned  technical staff  personnel,  as well as
fees paid to  sub-contractors  for work  performed in connection  with a client  engagement.  Technical  staff expenses
decreased 98% to $97,000 in the quarter  ended June 30, 2002 from $4.1 million in the quarter ended June 30, 2001.  The
decrease in technical staff expenses was primarily due to workforce  reductions in conjunction  with our cost reduction
measures.

As a percentage of revenue,  technical  staff expenses  decreased to 45% in the quarter ended June 30, 2002 from 61% in
the same  quarter  last year.  This  decrease  resulted  primarily  from  increased  utilization  due, in part,  to the
development of Concero  Marquee.  Adjusted for hours  associated with Concero  Marquee,  our utilization  rate was 111%
for the second quarter of 2002, up from 62% in the second quarter of 2001.

#### Research and Development

Research and development  expenses  consist of the costs  associated  with the development of our new product,  Concero
Marquee including,  salaries,  payroll taxes,  health insurance and workers'  compensation for technical staff personnel
assigned to the  research and  development  team.  Research  and  development  was  approximately  $1.1 million for the
second quarter of 2002.  We did not incur research and development costs in the second quarter of 2001.

#### Selling and Administrative Staff

Selling and  administrative  staff  expenses  consist of the cost of salaries,  payroll  taxes,  health  insurance  and
workers'  compensation for selling,  marketing and administrative  personnel as well as commissions and bonuses paid to
technical  and  administrative  staff.  Selling  and  administrative  staff  expenses  decreased  66% to  approximately
$492,000 in the quarter  ended June 30, 2002 from $1.4  million in the quarter  ended June 30, 2001,  primarily  due to
workforce  reductions  in  conjunction  with our cost  reduction  measures.  As a percentage  of revenues,  selling and
administrative  staff expenses  increased to 229% in the quarter ended June 30, 2002 from 22% in the quarter ended June
30, 2001, primarily as a result of lower revenues.

#### Other Expenses

Other expenses consist of all non-staff related costs, such as occupancy costs,  travel,  business insurance,  business
development,  recruiting,  training and depreciation.  Other expenses decreased to $(879,000) in the quarter ended June
30, 2002 from $4.7 million in the second quarter of last year. As a percentage of revenues,  other  expenses  decreased
to (408)% in the quarter  ended June 30, 2002 from 71% for the quarter  ended June 30, 2001.  These  fluctuations  were
primarily a result of cost  reduction  measures and lower  revenue.  Other expenses for the quarter ended June 30, 2002
include a $1.4 million  reduction to the accrual for excess  office  space as a result of a recent  restructuring  with
our Austin  landlord,  and a $210,000  reversal  of our  allowance  for bad debts  associated  with the  collection  of
previously  reserved  receivables.  Included in other expenses for the second  quarter of 2001 were severance  costs of
$811,000,  accrual for excess office space of $1.2 million,  accrual for impairment of excess capitalized  equipment of
$391,000 and an increase in our allowance for bad debt of $66,000.

Excluding the  aforementioned  individually  significant  items, other expenses were $696,000 in the quarter ended June
30, 2002, a decline from $2.3 million in the second quarter of last year.

#### Loss from Operations

We  recorded a loss from  operations  of $666,000  for the quarter  ended June 30,  2002,  a decrease  from a loss from
operations of $3.6 million for the quarter ended June 30, 2001

#### Income Taxes

A tax benefit  $605,000 was recorded in the first quarter of 2002 in connection  with a carry-back  made available by a
new U.S.  federal  income tax law which allows for a  temporarily  lengthened  loss  carry-back  period.  An income tax
provision of $2.3 million was recorded in the first quarter of 2001 in connection  with a non-cash  charge to establish
a valuation allowance against deferred tax assets for stock options.

#### Net Loss

We recorded a net loss of $616,000 for the quarter  ended June 30,  2002, a decrease  from the net loss of $3.4 million
for the  quarter  ended June 30,  2001.  Excluding  the effect of the  aforementioned  individually  significant  items
affecting  other  expenses and income taxes,  our net losses were $2.2 million and $949,000 for the second  quarters of
2002 and 2001,  respectively.  Our significant  declines in revenue in the second quarter of 2002 from the same quarter
of 2001,  and our  investment  in  research  and  development  of Concero  Marquee  in the second  quarter of 2002 were
primarily responsible for the increase in net loss.

#### Liquidity and Capital Resources

Our  operating  activities  used  cash of  $824,000  and  $2.6  million  for the  second  quarter  of  2001  and  2002,
respectively.  We purchased  approximately $541,000 and $90,000 of computers,  office and system equipment and software
in the  second  quarter  of 2001 and 2002,  respectively.  As of June 30,  2002,  we had  cash,  cash  equivalents  and
short-term investments totaling $9.4 million, down from $13.1 million at December 31, 2001.

As of June 30, 2002,  we did not have any  material  commitments  for capital  expenditures.  Our capital  expenditures
currently consist primarily of purchases to support our interactive television facilities.

We lease our office and facilities space through  non-cancelable  operating lease  arrangements.  At June 30, 2002, our
future  minimum  rental  commitments  totaled  approximately  $6.7 million and minimum  rentals to us by our subtenants
totaled  approximately  $1.0 million.  Subsequent to June 30, 2002, we completed a lease  restructuring with our Austin,
Texas landlord and reduced our future minimum rental  commitments net of subtenant rents by approximately  $2.3 million
to $4 million.  While future net commitments  under these operating lease  arrangements are generally not recorded as
liabilities,  much of the committed  space is in excess of our current needs as a result of our cost  reduction  measures.
Accordingly,  we have  established  reserves  totaling  approximately  $1.4 million at June 30, 2002,  net of estimated
sublease revenue and the effect of the aforementioned lease restructuring.

We recently  announced that we have ceased operations and begun the process of liquidating and dissolving  Concero.  We
believe that our current cash and  marketable  securities  and  investment  balances will be sufficient to complete the
dissolution and liquidation of the company.  .

Factors That May Affect Future Results, Financial Condition and Market Price of Securities

We may not be able to complete the liquidation of Concero in a manner that provides maximum value to stockholders.

We have ceased  operations  and have begun the process of liquidating  and  dissolving the company.  We have retained a
small  number of  employees  to attend to the  orderly  disposition  of our  assets and  liabilities.  In the course of
liquidating  the  company,  we may  not be able to find  buyers  for our  business  assets  or  obtain  the  amount  of
consideration we seek for our assets.  In addition,  we may not be able to negotiate the orderly  extinguishment of our
obligations to creditors.  These obligations  include,  building and facilities leases,  business agreements with third
parties  and  agreements  with  vendors.  The total  amount of capital,  if any,  returned  to  stockholders  after the
dissolution  and  liquidation  of the company will depend on our ability to maximize the  consideration  we receive for
our  assets,  minimize  the amount we must  expend to settle our  liabilities  and, to a lesser  degree,  expedite  the
liquidation process.

In  addition,  we will  experience  operating  losses  and  negative  cash  flow as we  complete  the  dissolution  and
liquidation of Concero.  Operating  losses will increase with the length of the  dissolution  and  liquidation  process
and may cause a corresponding decrease in the amount of capital, if any, returned to stockholders.

Our common stock may not continue to be traded on the  Over-the-Counter  Bulletin  Board  (OTCBB);  our stock price and
liquidity of our common stock may be adversely impacted.

Our common stock was delisted  from the Nasdaq  SmallCap  Market as of the end of business on August 6,  2002 and began
trading on the OTCBB  effective as of the opening of business on  August 7,  2002.  The OTCBB is a regulated  quotation
service  that  displays  real-time  quotes,   last-sale  prices  and  volume  information  in  over-the-counter  equity
securities.  A community of market makers trade OTCBB  securities by entering  quotes and reporting  trades.  If market
makers  choose  not to make a market  for our common  stock on the  OTCBB,  our common  stock will not be quoted on the
OTCBB and may,  instead,  be quoted in the pink sheets.  Because the OTCBB and pink sheets are generally  considered to
be a less efficient  markets,  our stock price, the liquidity of our common stock and our general  business  reputation
may be adversely impacted as a result.

##### Item 3.

##### Quantitative and Qualitative Disclosures about Market Risks

Information  concerning  market risk is contained on page 19 of our 2001 Annual Report on Form 10-K and is incorporated
by reference to such annual report.

##### PART II - OTHER INFORMATION

##### Item 4.  Submission of Matters to a Vote of Security Holders

At our Annual Meeting of Stockholders held on May 21, 2002 in Austin, Texas, our stockholders voted on the
following matters.

1.     The  election  of six  directors  to serve  until  the  annual stockholders'  meeting in 2003, or until their  successors
have been elected and  qualified.  The nominees of the Board of Directors were elected.

`AGAINST OR
                                                           FOR             WITHHELD            ABSTAIN
                                                       ------------    ------------------    -------------
           Edward C. Ateyeh, Jr...............           9,640,204                17,471                -
           W. Frank King, Ph.D................           9,641,259                16,416                -
           Kevin B. Kurtzman..................           9,641,724                15,951                -
           Michael J. Maples..................           9,640,358                17,371                -
           Wade E. Saadi......................           9,641,424                16,251                -
           Timothy D. Webb....................           9,568,675                89,000                -`

2.     To  ratify  the  appointment  of  Ernst  &  Young  LLP  as the  Company's independent auditors for the fiscal year ending
December 31, 2002.         The appointment of Ernst & Young LLP was ratified.

`AGAINST OR
                                                           FOR             WITHHELD            ABSTAIN
                                                       ------------    ------------------    -------------
          Ratification of Ernst & Young LLP
            as independent auditors...........           9,650,350                 3,050                -`

##### Item 6.   Exhibits and Reports on Form 8-K

None.

None.

`SIGNATURES

Pursuant to the  requirements of the Securities  Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.



Date:  August 14, 2002                                    CONCERO INC.



                                                          By:  /s/ TIMOTHY  D. WEBB
                                Timothy D. Webb
                                                              President and Chief Executive Officer




Date:  August 14, 2002                                    /s/    TIMOTHY D. WEBB
                                                    Timothy D. Webb
                                                           President, Chief Executive Officer and Director
                                                          (principal executive officer)

                                                          /s/    KEITH D. THATCHER
                            Keith D. Thatcher
                                                          Chief Financial Officer, Senior Vice President of Finance,
                                                          Treasurer and Secretary
                                                          (principal financial officer)`